Evening star. [volume] (Washington, D.C.) 1854-1972, 1887-06-14
CAUGHT IN THEIR OWN CORNER.
The Big Squeeze In Coffee Results In .
Disastrous Panic I'm New York.

Never before was such excitement known on
the New York Coffee Exchange as that witnessed
there yesterday. The panic among the bulls was
complete. and the brokers for the big bull opera.
tors threw coflee upon the market with reckless
ness that sent prices down with a whirL The
bulls blame the Gruner-Crossman syndicate for
starting the decline which eliminated IN panic,
but the bear syndicate strained every nerve 70
check the fall, wtthoutsuccesS In fact, syndicate
brokers were the only buyers at the opening,
which was at IL cents pound, over a cent below
Saturdays close, and although rally was caused
by the bears supporting orders, the rumors OF
troubled and continued selling caused them 70
stop buying and join the bulls in unloading the
stun they had taken early. All through the fore
noon the selling was coupled with The widest
scenes ever witnessed on the exchange and In all
the ofrices there were knots OF brokers gathered
discussing the prospects OF a recovery. In the
afternoon there was some hope OF rally, but heavy
selling continued, and soon the price fell on In
heavy fluctuations until IL reached 15 cents q
pound. This decline was accompanied by the
notice Of the suspension OF three frms-B. G. Ar
mold Co, Norton, Weyl Benan, and Mackay
Small
After the announcement of these failures an or
gained EFFORT was made by the prominent houses
like ODonahue, Gruner and Crossman 70 sustain
the market and they succeeded In causing q rally
OF about one cent all around. The failure OF B..
g. Arnold & Co attracted the most attention, as
they are they most prominent house In the trade,
but 1t was generally anticipated. The senior
member OF the hrm was caught in 1852 by the
In coffee. and was compelled to suspend for over
81 OOO, 600 He started In business again, how
ever, and was successful He ascr1bes the failure
to the fact that his customers were so tar away
that 1t was impossible to reach them in time to
obtain Suffcient margin to meet the decline. He
could make no statement Of his liabilities, and
said that he could not say anything about the
chances OF reSuming. Outsiders claim that the
nrm has been carrying 100000 bags OF coffee for
party. and it is estimated that the liabilities will
amount to 81, 100000. There was some talk OF
trouble in banking circles as result OF the panic,
the market value on coffee, 1T is hard to see
how any OF them could have been involved
Mackay Small, one OF the suspended firms,
are supposed to have liabilities OF 500, 900.
The liabilities OF the other firm are small.
w. j. Norton Co., coffee brokers, or 100 Water
street, failed with liabilities OF about $50 900.
Mackay L. Small were formerly connected with
Mr.. Arnold, the former as partner and the latter
as clerk, but since theAbegnning OF the year have
been doing business on their own account. Mr..
Mackay formerly resided in Baltimore, as did w.
]. Norton.
SUCH SCENES NEVER BEFORE WITNESSED.
The fall in coffee represents drop OF about 30
cents on the dollar. Nothing but vast capital was
able to withstand the call created by such a
difference with large orders out It is feared that
other houses Will go under. The scenes On the
floor OF the exchange We're the most remarkable
that have ever been witnessed there, and the con-
realize that the sales OF the day were twice as
large on any previous day In the history OF the
exchange. Yet such was the fact, for 4l2, 600
bags were Sold 225, 600 bags being sold after the
second call
Whether yesterdays panic represents the end or
the beginning OF declining market IL Is difficult
TO say. The bull speculation this year has been
based on the anticipation OF a short crop during
the crop year beginning July next The crop OF
the year just ending apprOximates 1000 900 bags
but conservative bulls estimate that the next crop
will be $500, 600 bags. In addition to this, they
point TO the TACT that the stock in Europe is
bags less than last year. But even the bulls admit
that the boom was carried too far, and that the
advance to over 20 cents pound was TOO
rapid. Joseph j. O'DOnohue summed up the Situ-
alton when he said: "The market fell or Its own
weight and would have gone lower II had not
come to the rescue by purchasing 1O0, 600 bags"
Late In the afternoon private cable was re-
ce1ved by Arnold e. CO. and j. NJ. Edwards Co.
notifying them, through Bradshaw, OF Rio jan
GIRO, that the expectation OF september cofYee
would probably be reduced from $50 900 bags to
considerably less than 600, 900 bags. Such a
step, by reducing the supply, Will bull the market,
and, as result this announcement was CRATE
fully received.